Can a 40-Hour
Workweek Actually
Improve Productivity?
As long hours become
habitual, science tells
us that productivity and
employee engagement
may actually take a
nosedive. Is it time to reevaluate your stance on
the standard workweek?
Angela checked the last item off this week’s to-do list and looked at her watch: 5 p.m.
“Woo-hoo – I finished right on time and I got it all done!” Angela’s company has a strict
40-hour workweek policy. No overtime unless it’s absolutely necessary.
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Bottom Line
Angela is more focused and gets
more done in 40 hours than she used to
when she felt compelled to work longer
hours. Plus, she’s not stressed about
being late picking up the kids from day
care, and most nights, she has time to
get a healthy dinner on the table instead
of the carryout habit she fell into.
No, you’re not reading about a
fantasy company or a preview of the
next episode of Undercover Boss.
In today’s increasingly competitive
environment, companies are taking a
fresh look at how to balance employee
engagement with the need to improve
productivity.
The debate about productivity
and hours worked isn’t new. In fact,
economist John Maynard Keynes
famously predicted a 15-hour workweek
in the 1930s. The subject is now getting
increased attention. Recent data shows
that work hours can be shortened while
maintaining or even improving output.
How much are
we working?
A 2014 Gallup study found
that U.S. full-time employees
average 46.7 hours a week.
For full-time salaried
employees only,
the workweek
is even longer:
49 hours
on average –
a full day longer
than a 40-hour week.
How we got here:
The history of the
40-hour workweek
When the federal government first
started tracking work hours in the 1890s,
it wasn’t unusual for manufacturing
workers to log 100 hours a week.
The move to work a shorter workweek
began in the 1860’s, but didn’t gain
much traction until the 1900s, when
two large printing firms in Chicago
conceded to union demands for a
40-hour week.
Over the next several decades, more
pressure from unions and federal laws
culminated in the standardization of
how many hours employees could work.
September 3, 1916:
Congress passed the Adamson
Act, which established an
eight-hour workday for
interstate railroad workers.
September 25, 1926:
Ford Motor Companies
adopted a five day, 40-hour
workweek.
June 25, 1938:
Congress passed the Fair
Labor Standards Act (FLSA) that
limited the workweek
to 44 hours.
June 26, 1940:
Congress amended the
FLSA, limiting the workweek
to 40 hours.
Source: Business Insider, Here’s How the 40-hour
Workweek Became the Standard in America, Shana
Lebowitz, October 24, 2015.
Bottom Line
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Fewer hours, but more
productivity
It seems intuitive that the more someone
works, the more he or she should accomplish,
right? Not so, says John Pencavel of Stanford
University.1 His research found productivity
declines when people work more than 50
hours a week and output at 70 hours a week
was no different than output at 56 hours.
Thus, if employees working 70 hours a week
receive overtime pay, the company is paying
for an extra 14 hours of little to no additional
output!
Research by Erin Reid, a professor at
Boston University’s Questrom School of
Business, discovered that managers were not
able to discern between the performance of
employees who worked 80 hours a week and
those who worked fewer hours. Reid’s study
also didn’t find any evidence that employees
working less accomplished less, or that the
overworking employees accomplished more.2
Sweden is another country that’s taking a
close look at productivity. A study conducted
in 2015 experimented with a six hour
workday in an eldercare facility. The findings?
Productivity and quality of care increased,
along with employee well-being.3 Similarly,
more than a decade ago, a Swedish Toyota
plant switched to two shifts, each working six
hours a day. The result? Turnover went down,
customer satisfaction went up, and profits
increased by 25%.4
Counting hours for the
government
For most employers, the focus on hours
worked is not limited to productivity.
Certain federal (and state) laws dictate
how companies set work hours for their
employees.
For example, the Affordable Care
Act (ACA) Shared Responsibility Rules
require companies with at least 50 fulltime employees or full-time equivalents
to provide health care benefits that meet
certain coverage levels. The ACA defines
full-time as someone who works 30 hours
a week, on average.
The Fair Labor Standards Act (FLSA)
regulates extra pay for extra hours
worked. Under the FLSA, the workweek
is defined as seven consecutive days,
and the threshold for being eligible
for overtime pay is 40 hours a week. In
many cases, certain salaried employees
are “exempt” from overtime pay rules.
However, a recent update to the FLSA
that will take effect on December 1, 2016,
redefines overtime rules for white-collar
workers at lower salary levels.
It’s not just about complying with the
regulations. How companies establish
work schedules also depends on many
other factors, including their industry,
business seasonality, and the kind of
workers needed.
Email policy in France
A new French law makes it illegal for
companies to send emails to employees
outside of regular work hours.
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Bottom Line
With employment on the rise
and the scramble for skilled
talent getting more intense,
business leaders are exploring
new ways to boost output and
engagement, including a fresh
look at an old concept: the
40-hour workweek.
Food for thought?
Many people choose to work longer
hours because they feel it’s the best way
to get recognized and rewarded. Others
do it because it’s part of the culture of the
business or industry in which they work.
Others are driven by earning more money.
Science tells us that exhausted employees
aren’t better employees. Fatigue leads to
errors, accidents, health problems, and a lack
of creativity. Certainly not all overtime can
be eliminated. But when long hours become
habitual, it can be detrimental to productivity
and employee engagement.
ADP® can help you maximize the way your business works
Wondering if the cultural shift to a strict 40-hour workweek and changing the work hours at your
company will make a difference? ADP can help you think through the impacts, navigate labor and
benefits laws, and help you build competitive pay and benefit packages. Not only can this help
you motivate your employees, it can also lead to increased productivity and engagement, as well
as increased retention of key employees.
he Economist, Proof that you should get a life, C.W., December 9, 2014.
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Harvard Business Review, The Research is Clear: Long Hours Backfire for People and for Companies, Sarah Green Carmichael, August 19, 2015.
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The Guardian, Efficiency up, turnover down: Swedish experiments with six-hour working day, David Crouch, September 17, 2015.
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ibid.
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Bottom Line
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